You Shouldn’t Be Getting Excited About The New Tipping Law

The government, two years after announcing they might do something, have passed a legislative law that will prevent restaurants from taking any percentage of tips on cards from the serving staff… well at least not in to the company’s pockets anyway.

If you’re unfamiliar with these events, have a read here and come back in a bit.

This is of course a huge step in the right direction for hospitality workers in terms of where their tips go. Unfortunately, it’s not going to be all peachy and bright.

Hospitality workers are notoriously poorly paid, work zero hour contracts and can face some of the most horrific treatment at the hands of patrons. Normally the expected reaction to this is: “Well get a proper job that pays you better and you wont have to worry”because life is simple and rosy and the economy hasn’t been fucked to the point where it resembles America’s political system and every other Facebook post is a motivational quote telling you to find a job you love doing rather than one that just pays the bills (ha, JK every political system is fucked but it’s fun to rail on countries that aren’t ours isn’t it and motivational posts on Facebook are as motivational as a diabetic hamster). Plus, not to mention that people actually enjoy working in hospitality – shocker, we know.

Previously, huge companies such as Living Ventures (yes, we are allowed to say their name, it’s not a Beetle-juice affair where they’ll show up in the comments if we say it too many times) took as much as 50% of all card tips and service charges from staff with the other 50% being redistributed between different areas – commonly the server who received the tip would go on to collect about 30-40% and then be taxed on said amount. Staff were faced with disciplinary action if they told the truth about who would receive any tip left on card. The government’s new legislation means that this practice, if it hasn’t already, will have to cease.

We do have to make it clear that there was no law that said they or any other company couldn’t do this. It was all above board and completely OK to do. Tips left on cards have always been the property of the company. Servers, bartenders and chefs have never been entitled to them. It’s immoral as fuck and shadier than Starbucks’s accountants, but it was never illegal.

The new proposed legislation has no time frame for when it will be implemented, and there is no mention of whether practices such as TGI Fridays’ will be affected by the ruling. For those not in the know: TGI Fridays faced a serious of strikes recently as staff were unhappy with the policy of TGIs taking 30% of their card tips to pay the kitchen staff in lieu of a pay-rise. We at Cheapest Shot and probably everyone in hospitality except for servers all agree that everyone should be tipped out fairly, but not instead of a pay rise. Cheap fuckers.

There’s also no mention of any action being taken against the practices currently carried out by chains such as Turtle Bay (Cheapest Shot naming all these mother ‘uckas up in here) who implement the levying of table sales on to their staff. Have a read of their “Fair Tipping Policy” – Turtle Bay’s spin doctor needs a pay-rise because that’s a brilliantly worded policy that looks so friendly whilst being so shit.

Essentially: Turtle Bay “charge” their servers 3% of all their sales for that day. If a server gets a table whose bill comes to £300, the server has to personally pay the company £9. If they don’t make enough tips to cover their sales for that day then it’s out of their own pocket. This technically takes them below minimum wage if they reach the cap every day, but we’re guessing that’s too much of an issue for anyone to care about.

It needs to be noted that Turtle Bay have always come under fire for the policy of taking 3% of a server’s table sales directly from the server themselves, we’re not covering new ground or releasing a Cheapest Shot exclusive, it’s been written about for the past three/four years… but everyone just kind of forgets about it every time until The Guardian remembers again.

Any new ruling that allows workers to keep more of the tips that are left to them is always a good ruling as sometimes workers rely on tips for essential items like, oh we dunno… food. (Yes, there is a percentage of workers that rely on tips to pay for their drug habits, but this should be addressed, not mocked… those liddle junkies). We should also say that we fully support tips being shared out across staff members in a “Tronc” scheme agreed upon by everyone except management.

What we’re left with, however, could be a dangerous precedent. This ruling will see A LOT of revenue that was so easily on hand be lost in the abyss of a server’s pocket. Companies will see a reduction in the money going into their accounts each month and this will need to be recouped somewhere. We could see higher prices be imposed, less hours available to work, a refusal from companies to pay any higher than the National Minimum Wage, an introduction of more levied table sales or a cap on how many “Premium Tipping Hours” a server can work in (We’re not sure if that would be legal, but we’ve met enough bar and restaurant owners to know that legality isn’t a word they’re familiar with).

Smaller businesses will of course be negatively affected by this ruling. A lot of small “independent” companies used the money generated from tips and service charges to offset financial struggles. There’s never going to be two winners in this one. We could see more businesses closing down as they struggle to find the money from somewhere else. The general public will turn on the smaller businesses for hiking their prices before they go after the corporate ones.

Is there any alternative to solving the current tipping situation in Britain? A lot of hospitality workers in Britain look to the American tipping culture with some sort of jealous and hopeful eyes that only befit a Golden Labrador when eating, however, there are a lot of things wrong with America’s hospitality system.

The extremely low rates of pay and lack of secure wage make tipping an essential in the states. There’s a saying over there: “If you can’t afford to tip, you can’t afford to go out”. It’s a slippery road to look to America for inspiration to combat the issues with tips though. Minimum wage would be abolished, the time it would take to get Brits acclimatised to what would almost be a shaming culture of tipping would take far too much time and would see a lot of people not tipping out of principle or even spite (which 100% already goes on). Bartender numbers would drop as a lot of people wouldn’t risk the uncertain nature of such an unstable income and we’d see a lot of bars go down to one bartender per shift as the potential to make tips becomes the number one priority of the industry.

Moving to an American style of tipping just wouldn’t be doable or sustainable. It would hinge on a lot of independent factors that would all need to come together. This is in a country that voted to leave the EU to seek absolute fuck all… so don’t hold your breath.

Should we abolish tips all together? If hospitality workers were given a more sustainable wage there would be less of a need to tip. Service charges would be a thing of the past, there’d be no more shitty tipping and the motives of workers would be changed from trying to earn those tasty tips (we’re not saying this is this sole motive of anyone working in this industry, if you got offended then… dunno. Eat a kiwi?).

The problem with abolishing tips, however, is that companies could take advantage and up their prices. No need to tip means a customer can afford to pay more for their food and drink and we all know what happens when businesses put their prices up #TripAdvisor. Wages likely wont increase to anything remotely like what a server or bartender could have earned if tips were still in action and some companies actively recruit staff based on their tip appeal.

Companies are not going to sit back and watch what was once an easy way to generate money just slip out of their hands. There will be a backlash to this ruling and it will not be a good one. You can guarantee there are a fuck ton of lawyers and boffins figuring out ways to get around this ruling and make money elsewhere. Loopholes are everywhere, and no-one knows how to jump through them as well as corporate companies.

In short: Companies WILL get this money back in some way shape of form. Whether they pass it on to the customer or find another way of getting it from staff. They will recoup that money and no-one should be surprised when it happens.

Is this a step in the right direction for tipping? Yes, but only because the only way was forward anyway.

Will there be a lot of repercussions because of this ruling? Yes. There will always be companies that care more about their bottom line than the people that help them achieve it.

Will anyone ever win? Nope, but at least chefs might get tipped a bit more now (HA. That was the best joke of this entire article).